Tinubu, Two Years Later: Is Nigeria Transforming or Regressing?

The Financial Times‘ editorial on President Bola Tinubu’s first two years in office offers a commendably nuanced and optimistic assessment. But an average Nigerian, who has become poorer and faces severe economic uncertainties, would disagree sharply.

The Nigerian economic landscape presents a fascinating paradox. On one hand, Tinubu’s administration has undertaken audacious initiatives. On the other hand, these very reforms have unleashed a severe cost-of-living crisis, plunging many Nigerians below the poverty line and raising critical questions about the path to inclusive growth.

The Unpacking of Macroeconomic Courage

The Financial Times rightly observes that Nigeria, for years, has been a “comatose giant,” held back by structural distortions. President Tinubu’s immediate actions upon assuming office were nothing short of a shock to the system, demonstrating a political will rarely seen in previous administrations.

The removal of the petrol subsidy on May 29, 2023, a policy that had bled the national treasury of trillions of Naira annually, was a monumental step. While economically sound, freeing up significant fiscal space, its immediate consequence was a sharp surge in fuel prices, cascading into increased transportation costs and higher prices for goods and services across the board.

Equally pivotal was the Central Bank of Nigeria’s (CBN) pivot towards monetary policy orthodoxy, particularly the unification of the exchange rate. This move, which saw the Naira depreciate significantly from approximately N400/$ to over N1,500/$ at its peak, and now hovering between N1,590/$ and N1,600/$. This was designed to eliminate arbitrage, attract foreign investment, and foster market transparency.

The Financial Times acknowledges that “the naira has stabilised, with the gap between the official and black market rate shrinking to almost nothing,” a crucial development for investor confidence.

These reforms appear to be laying a foundation for macroeconomic stability. The World Bank forecasts Nigeria’s GDP growth by 3.6% in 2025, a notable improvement that, if achieved, would mark the best performance since 2014 outside of the post-COVID rebound.

Indeed, the GDP grew by 2.98% (year-on-year) in real terms in the first quarter of 2024, indicating positive momentum. Furthermore, efforts to curb oil theft and optimise marginal fields have seen crude oil production recover from a nadir of 1 million barrels per day (bpd) to approximately 1.25 million bpd in May 2024, bolstering foreign exchange earnings.

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The Nigerian Reality Check

While the macroeconomic indicators offer a glimmer of hope for investors, the narrative on the ground for the average Nigerian is starkly different. The Financial Times editorial itself concedes that the positive economic outlook “may come as a surprise – or even sound like a sick joke – to tens of millions of Nigerians who are suffering the worst cost of living crisis in a generation.” This sentiment resonates deeply across the nation.

Inflation remains a formidable foe. As of April 2025, Nigeria’s headline inflation rate stood at 23.71% year-on-year. More critically, food inflation, the most visceral measure of hardship for households, was 21.26% in April 2025, having previously soared past 40% in 2024.

The Naira’s devaluation, while necessary for market efficiency, has made imports prohibitively expensive, driving up the cost of essential goods in an economy heavily reliant on them. This has severely eroded the purchasing power of the average Nigerian, whose monthly income, often estimated around N100,000 to N150,000, struggles to keep pace with soaring prices.

The social impact is profound. Reports from the World Bank and the National Bureau of Statistics (NBS) indicate that over 129 million Nigerians now live below the national poverty line.

While the official unemployment rate was 5.3% in Q1 2024 (under a revised methodology), the reality of underemployment and job losses, particularly in the informal sector and manufacturing, paints a grimmer picture, with some estimates suggesting a much higher effective unemployment rate.

The steep electricity tariff hike approved in April 2024 for Band A consumers further burdened businesses and households, impacting operational costs and contributing to factory closures.

The Imperatives for Sustainable and Inclusive Growth

The Financial Times rightly points to critical areas where the administration must intensify its efforts.

First, tackling inflation with greater urgency is paramount. This requires not just monetary tightening by the CBN, but also coordinated fiscal interventions, including initiatives by state governments to boost agricultural productivity, improve farm-to-market logistics, and enhance security in food-producing regions.

Second, the push for tax reform must be sustained and transparent. Nigeria’s tax-to-GDP ratio, at 9.4% in 2023, is indeed among the lowest globally and regionally, as corroborated by various economic analyses.

The Tinubu government’s ambition to double this to 18% is commendable. However, for this to be effective and accepted by the populace, there must be a clear and visible commitment to utilising these increased revenues for the public good – investing in “woefully neglected schools and clinics,” as the FT suggests.

This is fundamental to rebuilding the social contract, which has been dangerously frayed. The optics of public spending, such as the acquisition of an “extravagant presidential jet,” as the FT highlights, must be carefully managed to avoid undermining public trust.

Third, and perhaps most crucially, security remains the elephant in the room. The pervasive banditry, kidnapping, and insurgency continue to cripple economic activity, especially in the agricultural sector, directly exacerbating food insecurity and inflationary pressures.

A decisive and sustained effort to restore peace and order across the country is not merely a security imperative but an economic one. Businesses cannot thrive, and citizens cannot engage in productive activities, under constant threat.

A Test of Resolve

President Tinubu’s first two years have been characterised by bold, arguably necessary, economic reforms that have set Nigeria on a path towards macroeconomic stability. The initial signs are encouraging for investors, with improved foreign exchange liquidity and a nascent recovery in oil production.

However, the true test of this administration’s resolve lies in translating these macro gains into tangible improvements in the lives of ordinary Nigerians. The “shock therapy” has been administered, but the recovery period requires careful management, effective social safety nets, and a determined effort to address the root causes of insecurity and poverty.

As Nigeria inches closer to the 2027 election cycle, President Tinubu must resist the temptation to slow the pace of reform. Instead, he must redouble efforts to ensure that the economic growth is inclusive, sustainable, and genuinely felt by the millions of Nigerians currently grappling with the harsh realities of a reformed economy.